Infrastructure
Ethiopian Railways Ordered to Pay Turkish Contractor $307.6 Million
Addis Standard · 3 hours ago · Read the Full Story on Addis Standard
AI SUMMARY
The London Court of International Arbitration has ordered the Ethiopian Railways Corporation to pay Turkish contractor Yapı Merkezi $307.6 million over a suspended railway project.
- The London Court of International Arbitration issued a final award ordering the Ethiopian Railways Corporation (ERC) to pay Turkish contractor Yapı Merkezi İnşaat $307.6 million in principal damages.
- The award is dated September 23, 2026, and was notified to the parties on October 2, setting the net principal amount as of June 30, 2026, after accounting for ERC's counterclaim.
- The unpaid amount carries a simple interest rate of 9% annually until full payment is made, and Yapı Merkezi is actively pursuing enforcement.
- The ruling concludes a multiyear dispute over the suspended Awash–Kombolcha–Hara Gebeya railway project, which was disrupted by the Tigray conflict starting in November 2020.
- The 392-kilometer electrified railway was designed to connect central Ethiopia with northern regions and the Addis Ababa–Djibouti corridor.
- Construction began in 2015 under a contract valued at approximately $1.7 billion, financed primarily by Turk Exim Bank.
- Overall project progress reached approximately 92% before construction was halted.
- Yapı Merkezi attributed project delays and losses to war damage, equipment looting, financing shortfalls, right-of-way disputes, and inadequate electricity supply.
- Yapı Merkezi initially sought claims approaching $1 billion, while ERC filed a counterclaim of approximately $1.6 billion.
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